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Report on the Value Pricing Pilot Program Through April 2012

The Value Pricing Pilot Program: Results and Emerging Trends

Since May 2009, a total of $30.7 million dollars in VPPP funds have been awarded to 12 States: California, Connecticut, Florida, Illinois, Massachusetts, Minnesota, New York, North Carolina, Oregon, Texas, Virginia, and Washington. These funds were awarded for a variety of congestion mitigation implementation projects or studies.

For information on other VPPP projects, refer to the VPPP Quarterly Report at https://ops.fhwa.dot.gov/congestionpricing/value_pricing/pubs_reports/rpttocongress/index_2012.htm.

Projects Involving Highway Tolls

Projects Deployed Since 2009

SR 237/I-880 Express Connectors in Santa Clara, CA

The Santa Clara Valley Transportation Authority was awarded $3,200,000 in VPPP funds in 2009 to implement the SR 237/I-880 Express Connectors project (shown in Figure 3). This project applies roadway pricing to relieve an existing freeway bottleneck at a gateway into Silicon Valley by variably pricing a carpool ramp that connects carpool lanes on two freeways. The project is the first part of a roadway pricing program to implement congestion pricing throughout the Silicon Valley. The project opened to traffic in March 2012. Results from this project are providing valuable lessons from pricing applied to what is essentially a queue jump (2 miles one direction, 4 miles in the other direction) — the first of its kind in the U.S. A Queue Jump is a facility that can be used to bypass points on the transportation network where congestion is particularly severe and occurs in a predictable pattern. Early results show significant travel time savings of up to 16 minutes, using the express connector as a carpool or by paying a toll.

"VPPP funds have been instrumental in our efforts to get I-237/880 Express Connectors implemented."

— Casey Emoto,
Santa Clara Valley Transportation

Figure 3 displays a drawing of the SR 237/I-880 Express Connectors (Source: Santa Clara Valley Transportation Authority)
Figure 3. SR 237/I-880 Express Connectors (Source: Santa Clara Valley Transportation Authority)

I-680 Smart Carpool in Alameda County, CA

Northern California’s first Priced Express Lane, covering 14 miles of I-680 Southbound from Highway 85 to Highway 237 (shown in Figure 4), opened September 20, 2010. This lane was previously operated as a carpool lane, and carpools, transit vehicles, and motorcycles are still allowed to use the lane for free. Between the hours of 5 a.m. and 8 p.m., the Express Lane is operated using dynamic pricing to ensure that traffic is always flowing smoothly. Express Lane users do not have the option of paying with cash; they must have a FasTrak toll tag mounted on their windshields. The Express Lane usage is still rising, as it hit a new high of toll trips in early February 2012. So far, more than a half million customers have chosen to pay the toll. Express Lane speeds are generally 7 to 10 miles per hour faster than the speeds in the other lanes during the peak morning hours.

Figure 4 displays a drawing of the I-680 Express Lanes (Source: Alameda County Express Lanes)
Figure 4. I-680 Express Lanes (Source: Alameda County Express Lanes)

I-15 Managed Lanes/BRT in San Diego, CA

The San Diego Association of Governments (SANDAG) opened its first HOT lane conversion project on I-15 in 1996, utilizing grant funding and support from the VPPP. The original dynamically priced facility included two reversible lanes that went a distance of 8 miles. It proved to be a fertile testing ground for many congestion pricing concepts as well as a live “laboratory" to observe traveler behavior in response to variable pricing. Many other States and regions in the U.S., then in the concept development and planning stages, were observing very closely to see how the public would respond to the hot-button issues facing the fledgling industry, including privacy, equity, preserving transit travel speeds, and technology. The success of that simple HOT lane conversion project was instrumental in the expansion and extension of the concept to the creation of a major bus rapid transit (BRT) corridor. By experimenting with the original I-15 HOT lane, the region found that there was great potential synergy between congestion pricing and BRT to provide the most effective and efficient major transit improvement for that corridor. In January 2012, SANDAG opened the final segment of the now 20 mile managed lane. The four new express lanes also include a moveable barrier that allows up to a 3X1 configuration of the northbound and southbound lanes. The new lanes also feature a sophisticated pricing system that varies tolls for solo commuters based on distance traveled along with the amount of congestion in the Express Lanes. Light rail transit had been in the Long-Range Transportation Plan for decades for this same corridor, but a viable funding source had never been identified. The BRT now serves as the corridor's fixed guideway system. The SANDAG has a major managed lane network defined in its long-range plan and design and planning on key corridors is underway.

Studies Completed Since 2009

Area Road Charging and Parking Pricing in San Francisco

This study, conducted in 2007 and awarded $1,040,000 in VPPP funds, explored the feasibility of a congestion pricing program for San Francisco. By studying various potential congestion pricing scenarios, the study team established that congestion pricing could be a highly effective way of managing congestion, reducing greenhouse gas emissions, and supporting sustainable growth in San Francisco. The study found that benefits from a potential congestion pricing program could include 12 percent fewer peak period vehicle trips, a 21 percent reduction in vehicle hours of delay, and $60-80 million in annual net revenue for mobility improvements.(7)

Two scenarios in particular were found to have the most potential: collecting a $3 a day bi-directional toll from vehicles entering or leaving the Northeast cordon in the a.m. or p.m. peak hours, or collecting a $6 a day toll in one direction from vehicles leaving the Northeast cordon in the p.m. peak hours. Revenues collected would be reinvested in transportation improvements for travelers in the Northeast cordon. In December 2010, the Transportation Authority Board voted in favor of pursuing an additional study of the congestion pricing concept, and the two most high-performing scenarios in particular. A decision on whether or not to implement congestion pricing is still at least 1-2 years away, following additional study and outreach. If that decision is made, congestion pricing would not likely be implemented in San Francisco before 2015.

Washington Express Lanes System Concept Study

The WSDOT was awarded $1,280,000 in December 2009 to conduct a Washington Express Lanes System Concept study. The WSDOT operates a 225 lane-mile HOV system as well as two reversible, general purpose express lane facilities (one of which will be replaced with light rail). Much of the HOV system has not met adopted speed and reliability standards for several years, impacting transit performance and costs. The WSDOT has proposed to convert the HOV and express lane system into a network of tolled express lanes that would continue to serve transit and carpools at no cost while allowing paying customers to enter the lanes for trips where timely arrival is particularly important. The price would be set dynamically based on traffic conditions in order to maintain high throughput and reliable speeds.

The WSDOT believes that an express lane system should be implemented to provide a consistent experience for its users throughout the region. This project identifies and recommends solutions for system-wide policy and design issues to define the express lanes concept for the Puget Sound region, develop specific implementation concepts for I-5, and propose system-level program staging that could be applied to complete the evolution from HOV lanes to tolled express lanes.

Recently, working papers were developed on user requirements and system design considerations, used by an interagency project coordination group to form initial system design and policy recommendations. Current efforts are focused on identifying potential express toll lane design concepts for I-5 between Tacoma and Everett, WA. The WSDOT executives are reviewing design concepts and key policy issues, with particular focus on HOV discounts or exemptions, use of photo tolling, pricing structure and access issues. The final project report is expected by September 2012.

Washington: Awareness and Acceptance of Pricing Project

In 2007, WSDOT and the Puget Sound Regional Council received $935,000 in Federal funding to test public awareness and acceptance of pricing (A&AP) and project-specific tolling concepts for use in refining those policies and projects. In addition, the agencies tested the effectiveness of communications strategies and tools to advance public awareness and acceptance of pricing.

The project was comprised of four key activities, all focused on understanding public acceptance issues that would enable or constrain broadening tolling to include corridor tolling and congestion pricing. These activities included:

  • Regional coordination on operation, outreach and legislative issues;
  • 520 Tolling Implementation Committee;
  • Pricing Task Force Support; and
  • Evaluation of existing and proposed toll projects.

When the project was initiated, the topic of tolls and congestion pricing was not new. The issue of pricing had been under discussion for several years in the Puget Sound region, but had been confined mostly to policy corners or agency planning studies. Figure 5 is from the final project report(8) and provides a view of the historical context for tolling in Washington that set the stage for the A&AP project.

 Figures 5 was prepared by the Washington State Department of Transportation and shows the 20 year timeline, from 1995 to 2015, for the implementation of Public Awareness and Acceptance of Pricing Activities for three important tolling projects in the State, including: SR 16 - The Tacoma Narrows Bridge; SR 167 - HOT Lane Pilot Project; and SR 520 - The Evergreen Point Floating Bridge over Lake Washington.
Figure 5. Public Awareness and Acceptance of Pricing Activities in Context of Washington State Tolling History

Studies Underway that Have Been Awarded Funds Since 2009

Trunk Highway 77 Managed Lanes

The Trunk Highway 77 Managed Lanes project in Minnesota was awarded $540,000 in VPPP funding in June 2009 for a pre-implementation planning study that explored and tested a number of managed lane scenarios to provide a higher level of service for all users. Specifically, the study aimed to evaluate the potential for developing enhanced capacity in a highly congested 7-mile stretch of the existing corridor through the development of lane additions and the use of fixed/moveable barriers with shoulder lanes and/or contra-flow lanes. The analysis has been completed and the final report has been reviewed. Three primary alternatives to improve the capacity of the corridor were suggested.

The Minnesota Department of Transportation (MnDOT) worked with local stakeholders to come to a consensus on two alternatives to be moved forward into the environmental analysis and preliminary design phase. Letters of support have been received to conduct further study on two of the alternatives, and Phase II of this project will begin in the spring of 2012. This phase will be a partnership with Dakota County that will consider how MnPASS can be preserved as an option along with development of BRT in the TH77 corridor.

Charlotte Region Managed Lanes Study

The North Carolina DOT and Charlotte Metropolitan Planning Organization (MPO) were awarded $400,000 in VPPP funds in August 2010 for the third phase of a series of studies to determine where managed lanes should be implemented in the Charlotte region to help manage congestion during peak travel periods. One of the primary goals of this project is to familiarize the public with congestion and gain their acceptance of managed lane projects. Different approaches will be developed and tested to determine the strategies which are the most desired by the public and the corridors that have the greatest need for congestion pricing. A better understanding of the policy and technical issues associated with congestion pricing will also be developed throughout this project. This study began in January 2012 and is expected to take approximately 1 year to complete.

Regional Bus Toll Lanes in Tampa, FL

The Tampa-Hillsboro Expressway Authority was awarded $800,000 in VPPP funds in August 2010 to advance the first regional network of bus toll lanes (BTL) in the Tampa area. The BTL is a highway-based transit solution that aims to create a financially sustainable transit service by combining funding resources and operational capabilities of public transit and toll agencies. The BTL is a price-managed lane with up to 10 percent of the capacity dedicated strictly to bus-transit. While buses would travel without paying the toll, the BTL would be open to use by all light-duty 2-axle vehicles and would be price managed to assure the desired level of service on the facility. The BTL would maximize passenger throughput by employing proven bus technologies, all electronic open road tolling and dynamic congestion pricing techniques. The final work plan and schedule for the study have been developed, and a number of outreach and organizational meetings are underway.

The Public Acceptability of Road-Use Pricing

The National Capital Region Transportation Planning Board in partnership with the Brookings Institution received a $320,000 VPPP grant in 2011 to investigate issues related to the public acceptability of road-use pricing. Using the Metropolitan Washington Region as a case study, this project conducted five invitation-based, deliberative forums to explore attitudes toward a variety of pricing options, ranging from variably priced toll roads to system-wide vehicle-based pricing systems. These community forums took place between October 2011 and January 2012. By engaging the public in an extended exchange of ideas, opinions and reactions, the goal of the project was to identify challenges and opportunities that decisionmakers would face if they were to move forward with implementing options for road-use pricing.

The forums included presentations on the current and projected state of transportation funding and congestion. Participants were asked to consider three scenarios for congestion pricing. These scenarios include: 1) a regional network of variably priced lanes on all freeways as well as some major roadways; 2) pricing on all streets and roads (based upon a Brookings Institution proposal from 2009) using vehicle-based GPS systems; and 3) zone-based charges in which drivers pay a fee to enter (or to drive within) a designated area or zone (a "cordon"). Participant opinions about these scenarios were documented through keypad voting, notes taken by scribes, and paper surveys.

Recently Awarded Projects

Based upon a solicitation for proposals, in August 2011 the following five projects involving highway tolls received VPPP grants:

  • Pricing the I-84 Viaduct in Hartford, CT, and assessment of the impacts of environmental justice issues that resulted from the original construction of the viaduct.
  • Full facility pricing on I-95 corridor from New York to New Haven, CT and identification of how toll revenues would be applied to provide strong support for transit.
  • Application of pricing on an existing toll road in Illinois and evaluation of steps to mitigate equity concerns for potential low-income users. The project will also evaluate how transit could be integrated and financed through priced managed lanes.
  • Examining environmental justice issues related to pricing I-30 in Texas, through the use of innovative ITS technology.
  • Implementation of a peak period toll in conjunction with dynamic ridesharing (dynamic ridesharing is explained further in the next section of the report) on the existing congested toll road, 183A Turnpike in Texas.

These studies have either not begun yet or are in very early stages with nothing to report yet. More information about these studies can be found in the Appendix and in the VPPP Quarterly Report at https://ops.fhwa.dot.gov/congestionpricing/value_pricing/pubs_reports/rpttocongress/index_2012.htm.

Projects Not Involving Tolls

In recent years, a significant portion of VPPP funds have been awarded to projects that do not involve highway tolls. The majority of these projects fall into one of three categories: parking pricing, priced vehicle sharing and dynamic ridesharing, or pay-per-mile initiatives.

Parking Pricing

Parking pricing encompasses parking policies that rely on market forces to influence the decision to drive, including variable pricing of curbside parking, commuter parking taxes, and parking "cash out" programs that require employers to provide their employees with the option to take the value of free or subsidized employee parking in cash in lieu of using the parking space provided by the employer.

Parking Pricing Projects with Recent Results to Report Managing Residential Parking in San Francisco with Carsharing and Unbundling

This study examined the effects of two residential parking requirements in San Francisco: that residential projects of 50 units or more offer one or two carshare spaces, and that off-street parking at residential projects of 10 units or more is “unbundled,” meaning leased or sold separately from the property. The study found these policies resulted in a significantly lower rate of household vehicle ownership and a higher rate of carshare membership, and that carshare positively influences residents’ decision of where to move. The most significant finding of the study is that the combination of unbundling parking with on-site carsharing vehicle access corresponded to an average vehicle ownership rate of 0.76 per household, which was a statistically significant reduction from the statistically indistinguishable rates of 1.03, 1.09, and 1.13 vehicles per household, where buildings had neither, just carsharing, and just unbundling, respectively. Clearly, then, there is a market for housing with unbundled parking and carsharing where customers respond with reduced vehicle ownership, and presumably take some of their savings and spend it for better housing and to occasionally use carsharing. The study also found a statistically significant difference in commuter mode choice between those with carsharing memberships (83 percent of whom used non-auto commute modes) and those without such memberships (only 70 percent of whom used non-auto commute modes). Relatedly, the presence of both carsharing and unbundled parking within a building was associated with a statistically significant increase in carsharing membership rates to 48 percent, versus 23 percent when the building only included carsharing, 20 percent when the building only unbundled parking, and 25 percent when the building neither unbundled parking nor offered on-site carsharing (the latter three all being statistically indistinguishable from each other).

The San Francisco study found that carsharing policies resulted in a significantly lower rate of household vehicle ownership and a higher rate of carshare membership, and that carshare positively influences residents' decision of where to move.

Parking Pricing Incentive Alternatives to Monthly Parking Passes in the Twin Cities, MN, to Discourage Daily Driving

This research targeted purchasers of monthly parking passes and examined the effects that the various alternative incentives tested as part of the study, which were bundled with the parking pass or offered in the form of a restructured parking pass, had on parking utilization and commuter mode choice. Programs tested included: Buying Flexibility, where a heavily discounted monthly transit pass (i.e., $20 instead of $130) was made available for purchase in combination with the parking pass (despite very heavy marketing, only 14 people purchased this, and while results clearly seem to indicate reduced parking and more transit use, the sample size was too small to find statistical significance); Disincentive Removal, where a monthly transit pass was provided for free to purchasers of monthly parking passes; Marginal Rebate, where not only was a monthly transit pass provided free to purchasers of monthly parking passes. Also, those taking transit instead of parking on any day of the month would receive a $2 rebate, reflective of the marginal parking cost being $7 per day and the marginal transit cost being $5 per day, and; PayGo Flex-Pass, which is the same as Disincentive Removal, except that a rebate of $7 would be provided on days where neither parking nor transit were used (with the total monthly rebate capped at half the cost of the monthly parking pass). The most successful of the incentive programs studied, PayGo Flex-Pass, led to the proportion of driving days declining from 78.5 percent to 56.5 percent, a huge reduction.

New York City – PARK Smart

New York City Department of Transportation (NYCDOT) has implemented three "PARK Smart" parking pricing pilots since 2009 in Park Slope, Brooklyn, and Greenwich Village and the Upper East Side of Manhattan. Based on community support and feedback, NYCDOT has expanded and made permanent the PARK Smart programs in Park Slope and Greenwich Village. In Park Slope, metered parking is now $2.00/hour during peak hours (12:00 p.m. to 7 p.m.) and $1.00/hour off-peak. In Greenwich Village, metered parking is now $5.00/hour during peak hours (6 p.m. to 10 p.m.) and $3.00/hour off-peak. The extensive analysis and community engagement made possible by the VPPP grant allowed NYCDOT to tailor the pricing strategies and parking regulations to neighborhood needs. This meant addressing commercial loading concerns, expanding the peak-pricing area when each pilot was made permanent and tweaking meter shut-off times and time limits to improve curb performance. Overall results show that PARK Smart has been effective at managing parking demand. Interestingly, the results are more evident in parking turnover, where 18 percent more vehicles were able to find legal metered spaces as compared to pre-implementation levels a year earlier, than in curb occupancy. Occupancy levels, which were already high (over 90 percent) remained the same as preimplementation levels. The fact that pricing has affected duration more than occupancy is likely due to the lack of off-street alternatives to metered parking in PARK Smart neighborhoods.

Finally, traffic volumes declined by 7 percent after implementation, partly due to drivers finding parking more quickly and spending less time circling. The NYCDOT is now working with three more neighborhoods to launch three more PARK Smart pilots this year. These pilots will involve peak rate parking and community-tailored curb management strategies to ensure that PARK Smart meets each neighborhood's unique parking needs.

Priced Smart Parking Field Test at Commuter Rail Stations in San Diego. This project was originally designed to address the problem experienced by the North County Transit District's COASTER commuter rail service—running adjacent to the severely congested I-5 in northern San Diego County—which had experienced constrained ridership due to the lack of available parking at transit stations. Parking at the five North County origin stations (encompassing 2,296 spaces in all) was typically full by 7 a.m. Shortly after successfully testing reserved parking, the economy slumped, and the market for such parking collapsed because declines in rail ridership and parking demand eliminated parking shortfalls. As a result, the project was restructured to focus on developing pre-implementation products to be of use when the market later recovers, including a Concept of Operations and System Engineering Management Plan for smart, paid parking. In addition, stated preference surveys and other data were used to determine the relative impacts on parking and ridership of increasing transit fares by $1 round-trip or beginning to charge $1 for commuter parking if revenues need to be raised from one of these sources. The results indicate that, where parking availability is not constrained, increasing fares would result in less ridership and revenue losses than charging for parking among park-and-ride commuters.

Parking Pricing Projects with Results Not Yet Available
Off-Peak Commuting Incentives and Parking Pricing at Stanford University

This project focuses on learning about and using behavioral economics to design transportation pricing schemes in order to optimize consumer responses in furtherance of public policy goals. The project from Caltrans and Santa Clara County, with a central role played by a top-notch Stanford University team, has a critical built in incentive for success in that Stanford University faces serious consequences if specific targets for the maximum number of vehicles coming to campus during peak travel times are not met. The project uses Radio Frequency Identification tags and a smartphone application to record vehicle entry and exit times and will be deploying a number of financial incentives, including lottery awards (which the principal investigator deployed in an enormously successful project designed to shift commute times in Bangalore, India) for drivers who avoid peak travel times. Daily incentives will also be deployed to discourage parking in the most over-subscribed lots instead of in less desired, more peripheral facilities.

Parking Pricing and Real-time Guidance in Berkeley (City and University)

This project will implement variable pricing of the 1,275 downtown on-street parking spaces in the city of Berkeley in order to meet an occupancy target of 85 percent (versus 665 off-street parking spaces that the city owns and operates and 1,236 off-street spaces in privately owned facilities). On-street parking demand at current prices generally exceeds supply, while the off-street parking facilities almost always have excess capacity. Research shows an average of 30 percent of traffic on city streets results from motorists circling for available on-street parking and that appropriately pricing such parking would eliminate the congestion that circling motorists now cause. The city of Berkeley has already installed many multispace meters that accept multiple forms of payment and that are capable of being used for variable pricing. The project will support installation of new and enhanced real-time wayfinding capabilities, including variable message signs that display parking availability and price information for both on- and off-street parking, and will also enhance traveler information systems to provide this same information. The University has substantially increased monthly parking rates while holding daily rates steady. This encourages commuters to pay daily instead of monthly for their parking and to avoid driving and parking when possible. The University is exploring measures to further reduce monthly parking and to variably-price parking on campus reflective of parking location and occupancy. A range of complementary transportation demand management measures will also be deployed.

Incentives to Reduce Off-Street Parking Supply and Car Use in King County, WA

This project promotes livability by using financial incentives to reduce the supply of and demand for parking in new developments and by providing new residents with a range of transportation choices that are less costly than car ownership. These, in turn, facilitate the building of more compact, transit-oriented communities. The project entails hosting forums and focus groups among developers, and later will design and then pilot incentive programs to reward developers and local governments for reducing parking supply/requirements and for facilitating transportation alternatives. A database and monitoring system are being created to gain a better understanding of parking demand, focused especially on the desirable situations where parking is priced, unbundled from unit costs, and paid for directly by consumers. Results will be widely disseminated. A local competitive grant program will also be established as an incentive for localities and developers to take aggressive actions to reduce parking supply and to promote alternatives to car ownership and use.

Commercial Delivery Parking Pricing in Seattle

This project will be testing on-street parking pricing for delivery trucks in an area below and adjacent to the Alaskan Way Viaduct, where a 5-year reconstruction project will cause a loss of as many as 800 visitor, customer, and commercial parking spaces. The project entails collecting loading zone utilization data through in-street sensors; communicating space availability to delivery truck drivers and dispatchers through a smart phone/Internet application; enabling reservations of spaces; facilitating meter payment alternatives; and encouraging shorter stays through graduated pricing. A matched pair pilot and control area will enable the effects of the pricing and other system enhancements to be ascertained. End user information surveys will be conducted. Price and policy changes are expected to evolve to best achieve availability targets in ways responsive to input from the delivery vehicle community.

Parking Pricing and Regulations Study in San Francisco

This pre-implementation study is examining what sort of areawide parking pricing and policy strategies applied to both public and private parking would bring about a level of congestion reduction (curtailing 10-15 percent of vehicle trips) similar to a previously evaluated cordon pricing scheme. The focus will be on policies affecting commuter trips. Currently, about one-third of car commuters to downtown San Francisco pay nothing for parking, many more underpay, and even where there is no subsidy, daily costs are often masked by monthly parking products. Strategies to be examined include: pricing of parking lot and garage entry points; per-space parking regulatory fees; mandatory unbundling of parking from property leases and sales; increased taxes on commercial parking operations and leases; mandatory employer-based travel demand management and transit incentive programs; and various potential parking cash-out requirements. Local businesses and others seem more amenable to parking pricing than cordon pricing and this study might suggest a path forward that is responsive to business and public concerns and the related political reality. The project will support development and deployment of a new parking sub-model, led by the University of California, Berkeley. It will also support a host of outreach activities, and the development of proposed accompanying transportation system improvements, funded by new parking revenues, focused especially on enhancing equity such as through transit service upgrades.

Priced Vehicle Sharing and Dynamic Ridesharing

Priced vehicle sharing involves the provision of vehicles, typically by a commercial vendor, for use by members in exchange for an hourly or daily charge. The periodic rates for use can vary in response to demand or be fixed. Customers have the advantage of utilizing the vehicle only when needed and can avoid owning a car or reduce the number of cars in a family. Dynamic ridesharing involves matching of drivers and riders without preplanning of a car pool. The ride matching process can be conducted in real–time aided by smart phone technology or can occur at pre-designated pick-up locations. Priced dynamic ridesharing adds the element of cost sharing.

Priced Vehicle Sharing and Dynamic Ridesharing Projects with Recent Results to Report
Variably Priced Carsharing in Tampa, FL

This project examined first the effects of overall hourly rate reductions and subsequently the effects of time-of-day and day-of-week pricing of carsharing(9) on utilization, where, after the initial across-the-board rate reductions, users were randomly assigned to either experience a 50 percent off-peak discount or not. The study showed that participants were significantly sensitive to changes in rental rates, both overall and based on time of day. A 20 percent discount from the base rate for sedans and a 33 percent discount from the base rate for a sport utility vehicle produced a very high price elasticity estimate of -1.59. These results indicate that variably priced carsharing could successfully shift usage from peak periods.

Priced Vehicle Sharing and Dynamic Ridesharing Projects with Results Not Yet Available
Dynamic Ridesharing Pilot with Pricing Incentives in Santa Barbara

Dynamic ridesharing is single-trip carpooling efficiently facilitated by telecommunications technologies and social networking structures, where participants need not bind themselves to travel arrangements until the last minute and make no long-term commitments. This project is implementing a technology-facilitated dynamic ridesharing project in the Santa Barbara region that includes a range of cash incentives to attract both drivers and riders to participate. The system is based on a global positioning system (GPS) enabled smartphone platform and involves commuters on two congested segments of U.S. Route 101. The program is initially recruiting 20 drivers and 20 riders in each of the two corridors (80 in total) by offering cash incentives and reimbursement for mileage and cell phone service. It will then expand to include 360 total participants (180 drivers and 180 riders) for a 12-month trial period.

Dynamic Ridesharing with Financial Incentives in Northern Virginia

This new project will implement a dynamic ridesharing in program Northern Virginia, which includes a range of cash incentives to attract both drivers and riders to participate. The region is seeking to provide innovative transportation solutions, such as dynamic ridesharing, to lessen the pending traffic morass from the scheduled Base Re-Alignment and Closure (BRAC) job relocations. Led by the private-sector partner, Avego, the project will recruit 500 drivers and 1,000 riders, focused on those whose commutes are changing because of BRAC, for a 6-month pilot. Avego's dynamic ridesharing software will be coupled with GPS-enabled smart phones to facilitate finding and executing ride matches, tracking and recording of journeys, and transferring money automatically (mostly from riders to drivers, although riders will be provided "credits" to spend before having to contribute their own funds).

Peer-to-peer Carsharing in Portland, Oregon

Peer-to-peer (P2P) carsharing will be implemented by Getaround, Inc., a company that has developed and successfully tested a low-cost enabling technology and system. The P2P carsharing, like neighborhood carsharing, converts all vehicle ownership costs to hourly rental costs that include insurance and gas. Human contact is not required for any part of the transaction. In a rigorous San Francisco study, carsharing was shown to lead 29 percent of participants to sell a personal vehicle and over 60 percent of participants to forego a vehicle purchase. The P2P carsharing could be offered at a lower cost than for vehicles leased exclusively for carsharing, enabling less dense and poorer areas to be served, and making shifting from car ownership to carsharing more attractive. Participating car owners will be able to maximize their revenue potential by using their own vehicles as infrequently as possible (and leaving them in the shared-vehicle fleet), further reducing congestion.

The project is designed to create a fleet of between 333 and 475 vehicles. In-vehicle technology will be installed to allow renters access to the vehicles at times the owners choose to make them available, and also to collect data on mileage and time of driving. The project will have a peak-period surcharge default and will uniquely offer Pay-As-You-Drive-Insurance (PAYDI) priced by the hour to both vehicle owners and renters. Data will be collected from the GPS in-vehicle units, the reservation system, and participant surveys and will be analyzed by the Oregon National University Transportation Center.

Priced Electric-Assist Bicycle Sharing in San Francisco

This project will test priced electric-assist bicycle sharing(10) at up to 25 locations, along with electric-powered bicycle trailers at up to 10 of the locations, in San Francisco and Berkeley adjacent to carsharing, including in areas where the federally funded SFpark parking pricing project is being deployed. The San Francisco Municipal Transportation Agency and San Francisco City CarShare will set an hourly price for the electric bicycles at 50-70 percent less than for cars, making the same reservation, access, and billing systems available for both. By providing prospective users an electric boost to help them pedal up San Francisco's hills, and electric-powered bicycle trailers (concentrated near supermarkets and in retail districts) to carry whatever purchases and other items need to be carried, the test will see how many carshare trips are replaced with electric bicycle/trailer trips. Travel behavior comparisons will be made between electric-assist bicycle sharing deployment neighborhoods and similar control neighborhoods, and between participants who are granted access to electric bicycles and a control group whose access will be temporarily restricted. Experienced researchers from the University of California, Berkeley, will lead the data collection, surveying, focus groups, and analysis.

Pay-As-You-Drive Insurance

By converting fixed insurance costs to per-mile or per-minute-of-driving charges, Pay-As-You-Drive Insurance (PAYDI) encourages voluntary reductions in driving and related decreases in congestion, air pollution, and crashes. Because of these benefits, it has garnered much interest, including from some State departments of transportation, MPOs, and environmental groups. Pay-per-mile insurance projects in Washington, Texas, and Massachusetts recently received funding from VPPP. The project in Texas will try adding incentives for efficient travel choices.

Pay-As-You-Drive Insurance Projects with Recent Results to Report
Minnesota Mileage-Based User Fee (MBUF) Research and Outreach

The MnDOT received VPPP funding in September 2006 to conduct statewide outreach on application of MBUF in Minnesota. Subsequently, in May 2011, MnDOT began conducting technical research of using MBUF as an alternative to fuel tax. This project developed into a statewide effort to investigate public understanding and opinions of mileage-based charges, via interviews with transportation experts and the public, focus groups with Minnesota drivers, a large sample qualitative public survey and an MBUF Policy Task Force that evaluates issues related to a potential MBUF system. The MBUF Policy Task Force issued its Final Report(11) in December 2011 with the following Summary of Recommendations: The MBUF approach is a potential supplement or an alternative funding method to Minnesota's current motor fuel tax. An MBUF system could be created that requires all drivers to pay their proportional share of roadway system costs while being flexible enough to be effective regardless of the type of future energy sources used for a vehicle. Still, MBUF is largely unfamiliar to the public and policymakers, and complex from the technical and policy standpoints. Many policy, technological and operational issues remain unanswered. Therefore, the Task Force does not recommend a statewide, full-scale implementation of MBUF until concerns are satisfactorily addressed. However, the Task Force recommends that exploration of an MBUF system for Minnesota continue to advance in a measured, informed, and thoughtful manner guided by the findings and recommendations presented above. Currently, MnDOT is conducting a technical demonstration with 500 participants from the Hennepin and Wright counties to test the effectiveness of using smart phone technology to collect MBUFs. This research is expected to be completed by December 2012.

Pay-As-You-Drive Insurance Projects with Results Not Yet Available
Ameriprise/NuRide Pay-Per-Mile Insurance and Supporting Incentives in Texas

Studies indicate that PAYDI would save 64 percent of households an average of $270 per year on each insured vehicle. The project includes Ameriprise Insurance and also an innovative outfit called NuRide, that partners with private companies in offering commuters, who find with NuRide's help alternatives to driving alone to work, incentives such as redeemable gift cards for popular establishments. The NuRide's system lists ride matches for requested times by the percentage of route overlap and allows users to limit searches by a host of factors, such as to a circle of personal friends and colleagues, to riders and drivers who other participants have rated highly, or to people of the same gender. This project will test the effects of PAYDI on driving and also the additional effects of the support and incentives offered by NuRide for ridesharing and other alternative-mode trip making. The Texas Transportation Institute is leading the evaluation and will be utilizing supplementary surveys, in addition to verified mileage to discern driving reductions from PAYDI pricing in itself and also with other monetary incentives.

Pay-As-You-Drive Insurance Implementation with Plymouth Rock in Massachusetts

This project, a cooperative undertaking by the Massachusetts Department of Transportation, Division of Insurance, and Executive Office of Energy and Environmental Affairs—along with Plymouth Rock, the Conservation Law Foundation Ventures and the Massachusetts Institute of Technology (as the evaluator)—will offer real PAYDI. Over 3,500 participants will be enrolled and before—pricing driving data on all participants will be collected. There will also be monitoring of an additional 5,000 drivers who are never priced, to serve as a control. Different pricing protocols will be tested, varying the form of pricing (first using straight mileage pricing, then varying mileage rates by location and time of day), the timing of billing and payment (including a product where miles are paid for soon after driven, versus an alternative where drivers earn rebates for curtailing their driving), and the nature and frequency of communications to customers. Because insurance is very costly in Massachusetts, and also because the pilot will over-concentrate recruitment in congested urban areas where there are good transit and other alternatives to driving, it is expected that substantial changes in driving behavior will result, demonstrating the potential for big reductions in congestion if deployment were to be further expanded beyond the pilot. A thorough study plan was included with the application that, among other things, will ensure that effects of PAYDI not only on mileage, but on driving during congested times and in congested conditions, will also be discerned.

Pay-As-You-Drive Insurance with PEMCO Insurance in Washington State

This pilot will install field-tested telematics recording devices on a sample of approximately 5,000 vehicles, collect baseline data, select a PAYDI premium structure, and roll out and test it in the State of Washington. In addition to mileage, the telematics devices will collect data on where driving occurs, total driving time, speed, time and day usage, routes, and aggressive stopping and acceleration, some of which may be incorporated into the premium structure.

Study participants will be recruited from PEMCO policy holders. Half of the participants in each experimental group will receive free transit passes along with the PAYDI. Participant surveys before, during, and after the study phase will address issues of customer satisfaction, changes in travel modes and travel behavior, use of transit passes, and intentions to continue with their current insurance policy. A control group, whose mileage and claims' rates will be measured just as for the experimental groups, will receive discounts based on traditional risk factors.

Emerging Trends

Some key issues and trends that will become important in the coming years and will benefit from support under the VPPP include:

Integration Across Operational Strategies

An emerging trend in congestion pricing programs is the integration of elements across operational strategies that include pricing and tolling, employer-based travel demand management programs, and ITS technologies like active traffic management and those that provide real-time traveler and transit information on personal communication devices. The I-35W Express Lanes project (see page 30) has incorporated dynamic pricing, active traffic management, variable speed limits, priced dynamic shoulder lanes, telecommuting, and other supportive technologies.

It will become increasingly important to implement these operational and demand management strategies concurrently, to help reinforce their impacts through synergies between them, while providing more choices to travelers. Congestion pricing programs in the future are likely to develop in this form.

A Systems Approach to the Use of Managed and HOT Lanes

The managed lane and HOT lane facilities that have been planned, designed, and deployed over the past decade have had a corridor-level focus. The physical design and layout, operational approach, tolling policy and strategy, and concept of operations have been geared toward the local characteristics of the corridor and to meet the project’s objectives. Many of the larger metropolitan areas in the U.S. have defined extensive managed lane networks in their long-range plans and are beginning to deploy multiple managed lane corridors. Over the next few years, the FHWA can provide valuable assistance to these regions as they prepare for a much more complex set of issues related to systems of managed lanes aimed at meeting regionwide goals.

Managed Lane systems require a cohesive regional approach. Self-funding managed lane segments are a good start as elements of the system; however, the major improvements in reliable trip times and congestion relief are maximized through regional systems. Up until this point, State and local transportation agencies have been willing to fund projects for which managed lane segments will pay for themselves. Systems require regional sharing of costs and revenues. Local transportation agencies in the San Francisco Bay region have built and have extensive plans for managed lane projects that "pay for themselves." One of the biggest bottlenecks in the regional transportation system, and thus a gap in the existing HOV network, is I-880 through Oakland. In this case, the toll revenues returned would be a fraction of the billions that would need to be spent for that specific segment to be expanded as managed lanes.

Collection of required data and detailed analyses to Improve Public Acceptability

Acceptability is a common concern with tolling and pricing programs, but communication of robust analysis and data can successfully change public and decisionmaker opinions. The FHWA can play a crucial role in continuing to support technical evaluations of implemented programs and communicating the results and best practices to stakeholders. This outreach should focus not just on larger regions that may already be well on their way with planning pricing programs, but also smaller regions where incremental approaches such as parking pricing can best be utilized. This will allow smaller but rapidly growing regions to plan for and address system performance issues before conditions become worse. Making the case to the public is often the biggest challenge regions face, and the FHWA can support sharing information on communication strategies, messages, and vehicles to engage the public and decisionmakers effectively.

Performance-based Approach to Help Meet Regional Goals

By helping to smooth traffic flows, reducing congestion, and generating revenues for multimodal transportation improvements, pricing strategies can help meet several measurable regional goals:

  • Improved economic competitiveness through greater reliability and reduced external costs due to congestion delays;
  • More livable communities with multiple travel choices including transit, bicycling, and walking;
  • Environmental sustainability through reduced energy consumption, pollution, and greenhouse gas emissions;
  • Maintaining a state of good repair within the transportation system by reducing costs for much-needed infrastructure upkeep as well as expansion through the optimal use of existing resources.

The FHWA can support rigorous analyses and the development of tools to evaluate impacts of pricing programs on specific performance, economic, and cost metrics. The comparison of these metrics between programs will facilitate an understanding of program features that lead to the most beneficial impacts for given costs.

Integrating Congestion Pricing into Regional Plans

Activities under the VPPP have thus far provided valuable information about how pricing programs around the country moved from the planning phases through implementation, fulfilling planning requirements while under fiscal constraint, and strategically involving a multitude of key agencies. As interest in toll and non-toll pricing strategies continues to increase, efforts such as the FHWA Congestion Pricing Primer Series, and results from recent workshops on advancing regional goals through pricing (all completed as part of the VPPP) will provide additional support to communities interested in pricing as a congestion management strategy.

Inputs from practitioners, stakeholders and decisionmakers gathered as part of these activities show that three key aspects are important to advance pricing programs at the regional level:

  • Making a start by adding incremental project opportunities to regional plans, not necessarily starting with a big project;
  • Using program revenues not only to achieve project objectives like equity, transit funding, and so on, but, in doing so, also to facilitate collaboration between concerned agencies; and
  • Building partnerships and broad supporting coalitions from the ranks of research, industry, practitioners, as well as decisionmakers at the Federal, State, and local levels.

In all these aspects, the FHWA can play a significant role in continuing to provide lessons from a range of regions and institutional environments.

Establishing Supporting Tolling Policies

A key mechanism for advancing consideration of pricing approaches at the regional level is to create a supporting policy framework that requires consideration of pricing as part of new projects. For example, recognizing that future infrastructure needs would not be met by existing revenue sources, the MPO for the Dallas region, the North Central Texas Council of Governments (NCTCOG), established a key three-step policy emphasizing that any additional capacity necessary in the region will be tolled, if warranted, to raise funds for regional capacity needs. The policy stipulates that: (i) all new limited access facilities have to be tested for tolling feasibility and built as toll roads, if warranted; (ii) when existing freeways are reconstructed, the feasibility of tolled express lanes should be tested and these should be built, if warranted; and (iii) free lanes or gas tax lanes will not be converted to toll lanes.(12) This policy laid the groundwork for several managed lane pricing projects that are currently being planned and constructed in Dallas.

Another way policies that support tolling could be implemented is through establishing guidelines for public-private partnerships (PPP) and providing authority to enter such agreements; e.g., in Virginia, the State's Public-Private Transportation Act(13) enables it to work with the private sector to bring forward transportation improvements. The PPPs are increasingly being used to construct and operate pricing facilities, for instance, in Dallas, and Virginia.

Managed lane projects to date have fallen into to two basic categories:

  • Partial-pricing on existing HOV lanes, or minor expansion requiring relatively small investment, designed to offer a congestion-free option and typically pay for operations and maintenance (O&M) costs.
  • Major managed lane expansion projects, funded by traditional public sources through a PPP, which will recover full costs through tolling.

Expanding Technology Transfer and Outreach

There is a great wealth of reports, research, studies, presentations and other materials available in the areas of tolling and pricing, many of which have already been produced through support from the VPPP. The FHWA Office of Operations and Office of Innovative Program Delivery have been heavily involved in Congestion Pricing Outreach activities and products, including workshops, webinars, white papers, and primers for practitioners. These outreach activities and sources of information will need to be expanded to a wider range of regions considering pricing approaches that are at varying stages of conceptualization, communication, planning, and implementation.

7 San Francisco County Transportation Authority, Mobility, Access, and Pricing Study, December 2010,http://www.sfcta.org/images/stories/Planning/CongestionPricingFeasibilityStudy/PDFs/MAPS_fact_sheet_111010.pdf.

8 Final Report: Awareness and Acceptance of Pricing Project, Washington State Department of Transportation and Puget Sound Regional Council, May 2011, http://www.wsdot.wa.gov/NR/rdonlyres/FEC5D940-5B5E-4DE2-A3A3-E20B85894BDB/0/AAPReport052711.pdf.

9 Carsharing is designed to replace car ownership for people who do not need to drive to work every day, and to significantly reduce congestion and greenhouse gas emissions. Carsharing is a service that provides 24/7 self-serve access to a network of vehicles stationed around, which can be reserved by the hour or day via smart phones, internet and call centers. Source: http://www.carsharing.net/, accessed on April 23, 2012.

10 A bicycle sharing system is a service in which bicycles are made available for shared use to individuals who do not own them. The central concept of these systems is to provide free or affordable access to bicycles for short-distance trips in an urban area as an alternative to motorized public transportation or private vehicles, thereby reducing traffic congestion, noise, and air pollution. Source: http://en.wikipedia.org/wiki/Bicycle_sharing_system, accessed on April 23, 2012.

11 Minnesota Department of Transportation (report prepared by Humphrey School of Public Affairs at the University of Minnesota), Report of Minnesota’s Mileage-Based User Fee Policy Task Force, December 2011. http://www.dot.state.mn.us/mileagebaseduserfee/pdf/mbufpolicytaskforcereport.pdf

12 North Central Texas Council of Governments, Regional Value Pricing Corridor Evaluation and Feasibility Study, "Chapter 3: Guide for Applying Value Pricing in the Dallas-Fort Worth Region," June 2005, http://www.nctcog.org/trans/mtp/valuepricing/Chapter3.pdf.

13 The Commonwealth of Virginia. Public-Private Transportation Act of 1995 (as Amended) – Implementation Manual and Guidelines, December 2010, http://www.virginiadot.org/business/ppta-default.asp.

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